money

You might have to be the first personal finance instructor in your child’s life because no one else will be able to teach your children about money early enough. If you’re not sure which specific lessons are appropriate at different ages, read on. Continue reading

There are times when things will be inevitably tight around the house. When you are the only mouth to feed, it is easier to understand your current situation. However, as you dive into the family life, budgeting is not so easy to comprehend if you aren’t the one paying the bills.

Growing up, my parents were always very open about our financial situation at different times in my adolescence. They made sure to include my sister and I on what was happening very early on, and I am so glad that they did. At first, I had a hard time understanding, but as I got older, it began to make more sense.

The less involved the family is with finances, the less they will understand. It can be difficult for your growing kids to see why they can’t get those new clothes they want or go to the movies with their friends. The term “money doesn’t grow on tress” may not be enough to get them on the same page. Now is a great time to not only teach them, but show them the value of a dollar.

Making household budgeting a family affair will set positive habits for the future as well. So, how can you get the family involved?

Organize the information

Prior to holding a family meeting to discuss finances, gather up all of your bills and household expenses. This includes groceries, gas, car and house payments and so on. Also include those expenses that are not monthly but may only be quarterly or annually. Be fully prepared to also answer any questions about money that your kids may have.

Be open and honest

Lay everything out on the line. Don’t try to hide anything from your family, even if the news does not look so hot. This is the first step in everyone grasping the reality of the financial situation rather than their fantasy. By hiding certain pieces of information, they may feel money exists where it doesn’t and the problem will continue.

Show them what’s left

Try to have a personal spreadsheet of the expenses and income in the home to really make the point visible. List the pay dates and how each expense is paid. This will be a great way to actually show them what is left each month.

Encourage applying for jobs

Should you have a teen that is old enough, encourage them to get a job so that they can fund their own entertainment. Household chores are an excellent way to earn an allowance, but not all families have the finances to even provide such. I had my first job when I was 15 working in a greenhouse. It was seasonal from spring to early fall, so it worked out well with my school schedule. This taught me personally how to save money as I would save up my paychecks over the course of the months to use throughout the year.

Get everyone’s input

It may be wise to share the budgeting system you have in place for your home. I was around 10 years old when I began to understand that money was not endless and that some months were more difficult than others. Depending on the age of your children, you could ask for their input and have them be a part of the household budgeting process. Your kids may end up having more ways you can end up with more money at the end of each month by being willing to give up some of their own desires. It is likely that through this process, everyone would be willing to give up those additional unnecessary expenses like satellite TV so that you can do even more with the family income.

Younger children may not fully understand, but you can still find ways to show and teach them that your money supply is not endless. (Be on the look out for an article in the future about this topic.)

Your financial situation may not even be bad, but still informing the family of what is coming in and out will help enhance the household budgeting. Budgeting is never really a comfortable topic, but when you include the family, everyone begins to take on more responsibility. You’ll most likely find some pressure alleviated off of you as well.

When you fix your credit, you are one step closer to financial freedom. But, how do you do this?

Credit comes with its many benefits and of course its negatives. It takes careful, responsible spending and timely repayments in order to really see its positives and not experience its dark side.

Those in need of repairing their credit know how difficult it is to be approved for loans, receiving lower rates and getting ahead. But, there is good news. You still have hope and can fix your credit.

Fixing your credit can help you get closer to financial freedom. Here are some great tips to help you get started:

Don’t stop believing

Continuing with credit seems counter-intuitive, but using credit is a great way to achieve a good score. As long as you pay them back immediately, do use your credit cards. You also want to mix up the type of credit you use (i.e. installment accounts such as mortgages and revolving accounts such as lines of credit). Don’t wait to repay; not only does this harm your finances due to interest rates, but it hurts your score as well. Your payment history is one of the key factors of determining your credit score. You want to make sure you can prove to credit card companies you’re capable of timely repayment in order to improve your rating.

Open a savings account

Opening a savings accounts helps to reach a favorable credit rating. As simple as it may sound, this does show companies that you are financially responsible and have the resources to pay for debts.

Spread out your disputes

You can dispute items from your credit reports. If you do, however, just be sure to spread them out and do one item at a time, starting with the most damaging or largest items first. Disputing too many things at once signals a red flag to the credit bureau, and they could consider them to be insignificant. Make sure to really take time to examine your report.

Keep balances low

This one is pretty simple. Just because you have a $5,000 limit each month does not mean you should reach or max it. Keep your balances low so that they are easier to handle.

Get your monthly report

Tracking your monthly activity with your credit is just as important as tracking your other expenses each month. If something seems off, you will be able to dispute it right away. This is a good habit to develop. It will be a cost to get them monthly, but it will be worth it to keep you on a favorable path. To ensure your report and activities are current across the three major credit bureaus, retrieve reports from Equifax, TransUnion and Experian yearly. Not to mention, you’re able to get one free report from each bureau each year under the Fair Credit Reporting Act, making the cost of credit maintenance low.

Don’t create more debt

If you’ve put yourself in a bad situation with your existing debt, you generally should avoid opening more credit cards or loans to pay off what you have. This can really cause the problem to continue to spiral out of control. Instead, you need to start focusing on ways to reduce this debt in order to fix your credit. On the contrary, there may be times where it is OK to open another credit card in order to generate some positive credit history. A secured credit card, which requires a deposit that serves as your limit, could be the answer for you in those sticky situations. Just don’t sign up for unnecessary credit cards.

Know that this process will take time and dedication before you start to see improvement. There will be a many ups and downs on the road to credit repair, but try not to get discouraged. Make it a priority so that you can work toward that financial freedom you’ve been dreaming about for a while now. If you feel overwhelmed by the process, just take things one step at a time. Create better spending habits in order to ensure you are not in a situation like this in the future.

What steps are you taking to fix your credit? What route has worked best for you?